Embracing AI For Efficiency And Engagement

Artificial intelligence (AI) has entered almost all facets of our modern world. E-commerce consumers are greeted with chatbots when they visit online stores, employees across industries are using AI to increase productivity and, at the enterprise level, companies are in a rat race to improve and scale performance with AI and machine learning tools. In retail, an industry that typically lags in technology adoption, businesses are leveraging the next-generation tools to better manage costs and personalize communications with customers.

With AI becoming mainstream, small businesses are also looking to AI to streamline their operations, automate tasks, reduce complexities and better manage costs, but there’s room for further adoption. In fact, according to a recent McKinsey report, the share of micro-, small and medium-sized businesses that adopt technologies like AI is only half that of large enterprise companies.

As these small and medium-sized businesses (SMBs) consider taking a page from the enterprise playbook, SMB owners should consider the myriad of benefits AI offers. From automating daily tasks to smart inventory management systems to better communicating with customers for increased customer loyalty as trends of personalization reverberate across the industry, AI can make SMBs more efficient and future proof operations.

Eliminating The Busy Work With AI

SMBs play a vital role in the success of economies around the world, as the sector accounts for two-thirds of business employment. To bring these businesses into the modern world – where efficiency reigns supreme – it’s critical to understand how new technologies can aid in overall success.

According to a recent Prosper Insights & Analytics survey, the majority of SMB owners have heard of AI tools like ChatGPT, but there is still a gap in understanding the benefits and taking the initial steps toward adoption. But there is good news for the industry, as a recent survey of Shopify merchants revealed that 94% of SMBs plan to incorporate artificial intelligence into their business operations in 2024. And it’s no surprise, given how the technology can help business owners automate daily tasks, such as managing employees’ schedules or tracking key metrics.

While SMBs are no stranger to the grit and determination required to keep the business moving forward by crossing daily tasks off the to do list, less time spent on the repetitive tasks can help them focus on the tasks that require the human touch – whether that’s curating the shop floor or creating a strategy to grow the business further.

A simple example of this is automating orders that come in through email, a regular practice still especially for B2B merchants and wholesalers, to flow directly through AI into inventory management and accounting. Removing tedious steps from the everyday process, AI can help merchants free up time for more impactful work.

Easing The Management Of Complex Tasks And Costs

While AI works extremely well for automating reoccurring tasks, it can also help to manage critical projects that are more complicated. Kristjan Vilosius, CEO and founder of Katana Cloud Inventory, says that “small business owners need to understand that using AI-based tools for assistance with complex tasks, such as tracking and forecasting inventory levels in real time or managing a high volume of purchase orders from suppliers, can be hugely beneficial when it comes to both accuracy of the data and overall efficiency. By allowing AI tools to analyze complex data, businesses can ease the often-heavy burden of complicated, time-consuming work and make smarter decisions.”

It’s important to note that some technologies can be used for predictive analysis, too, which means that businesses can take a forward-looking approach to operations. The combination of AI and machine learning can offer small businesses the ability to forecast demand and plan to accommodate the ebbs and flows of demand. It can also help combat unforeseen supply chain disruptions or increasing costs of raw materials that can make or break small businesses if caught off guard. In fact, to counter the recent high material costs brought on by the Covid-19 pandemic and subsequent inflation, 73% of SMBs leveraged technology to help automate basic accounting tasks and predict cash flow.

Leaning On AI For Customer Relationship Management

From chat bots to personalized marketing emails, consumers have come to expect near real time responses to questions, recommendations based on their purchasing behavior and loyalty benefits. While 30% of SMBs identified leveraging new automation technology and AI as significant focus areas in the near term, many smaller retailers are facing staunch competition from large retailers who have fully adopted AI for customer relationship management.

“Small businesses should look to larger companies to help guide them toward best practices for both efficiency and customer satisfaction,” said Vilosius. “Large enterprise retailers often prioritize the bottom line, and by making all customer facing operations smoother, they know they can increase customer satisfaction both short and long term.”

Data from a study on the power of AI concluded that there was a strong correlation between customer satisfaction and efficiency. By adopting AI, SMBs can not only ensure overall efficiency, but also look to build better and more effective relationships with their core customer base. AI-based tools can offer alternative ways to engage customers in a way that is tailored to their specific needs. It can also help ensure that SMBs can respond in a timely manner, as modern consumers are accustomed to instant gratification.

All Signs Point To Adopting AI

As SMBs work to build their businesses, leveraging new technologies can offer much needed relief from daily, time-consuming tasks. It can also help to protect revenue by better managing the costs across the business from inventory management to marketing budgets. With customers adapting to near-instantaneous response times and personalized product recommendations, SMBs can incorporate AI to build a solid foundation for customer relationships that aid in increased loyalty.

The key is to focus on tools and technologies that play well together. Connectivity and easy integrations will ensure even complex operations get handled with correct and real-time data. One tool rarely solves everything, so building an AI-powered tech stack that can scale as the company grows is paramount. Above all, using modern technologies can ensure that SMBs can future-proof their businesses for years to come.

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